A $400 per metric ton (MT) premium affixed to all cocoa sales from Côte d’Ivoire and Ghana, the world’s first and second largest cocoa-producing countries, starting in the 2020/21 main crop season.
The LID was enacted by joint agreement between the countries’ respective cocoa marketing boards, Le Conseil du Café-Cacao (CCC) and Ghana Cocoa Board (Cocobod). The boards agreed to legislate a minimum price paid to farmers of 70% of $2600MT. This amount was considered a step towards paying a living income to cocoa farmers.
Assuming a $2200MT FOB price — which was roughly the world market price when CCC and Cocobod were establishing LID terms (2019/2020) — the additional $400MT would ensure a gross FOB of $2600MT, the target living income price floor.
The initial reaction to the LID was contentious. While most buyers publicly supported the LID, the heads of CCC and in particular Cocobod accused several multinational chocolate companies of finding ways to avoid paying the LID. In response, Cocobod and CCC threatened to suspend the in-country cocoa sustainability programs of any company that did not meet LID terms.
Since that initial season, there has been relatively little public controversy over the LID. The LID premium has continued to be attached to all cocoa sales from Côte d’Ivoire and Ghana.
Próximamente versión en español
Entry added: April 27, 2022
Verified on: September 14, 2023
Kristy Leissle, Scholar & Author, Cocoa & Chocolate Industries
“Côte d’Ivoire & Ghana set a fixed living income differential of $400 per tonne of cocoa to relieve farmer poverty,” Business & Human Rights Resource Centre, Latest News, July 15, 2019
“Dawn of the Living Income Differential’s potential major impact on West African cocoa farming,” Neill Barston, Confectionery Production, October 7, 2020
“Ghana and Côte d’Ivoire threaten cocoa sustainability schemes if producers don’t pay more for beans,” Anthony Myers, Confectionery News, October 14, 2019
“Hershey move of buying cocoa on futures market threatens LID agreement with Ghana and Côte d’Ivoire,” Anthony Myers, Confectionery News, November 23, 2020
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